For anyone thinking about borrowing money from, a guaranteed online personal loan can be both secured and unsecured. But what are they? Well the unsecured loan is just that, unsecured for the lender. This simply means that the lender in effect has to take you at their word that you will repay the loan plus any interest. As the risk to the lender is greater due to the fact that if loan repayments are not maintained. The interest rates for unsecured loans reflect the increased risk to the lender and for that reason are considerably higher than those for secured loans. In the event that a borrower fails to keep up repayments on an unsecured loan, the lenders only power is t issue a default against the borrower which is placed on the borrower's credit file for up to six years. This default notice may be removed by the lender if the borrower later fulfils their obligation set out in the credit agreement. Generally speaking a default once recorded will markedly reduce the chances of the borrower obtaining credit as any future lender will see the default as a large increase in risk. In the unlikely event that a lender does offer finance, it is highly likely that the interest rates will be high reflecting the increased risk to the lender. So how does a secured loan differ from that of an unsecured loan? To describe secured loans is relatively straightforward. Secured loans can be guaranteed online personal loans which are secured against a property. They are only accessible to persons owning their own property or holding another asset which the loan can be secured against. Unlike unsecured loans, a lender sees a secured loan as much less of a risk; why is this? Well unlike unsecured loans which have no security for the lender, secured loans are secured against an asset, usually a property. A guaranteed online personal secured loan credit agreement will in the event the borrower fails to keep up repayments, allow the lender to force the sale of the asset on which the loan was secured. They will be able to get their money back and the borrower will lose the asset. Therefore it is highly advisable to ensure that you can keep up repayments on any borrowing secured against you home. A lender will not think twice about forcing the sale of a property to recoup monies and the term repossession should be etched in your brain when considering borrowing against you home. Guaranteed online personal loans should only be considered after you have compiled a detailed budget and this topic is the subject of another article.